The result of the supply shocks of 1973-1974 was to
A) reduce aggregate output and raise the price level.
B) reduce the price level and raise aggregate output.
C) reduce both aggregate output and the price level.
D) raise both aggregate output and the price level.
A
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Jordan has the following assets and liabilities:Two cars$10,000House$200,000Mortgage$100,000Cash$1,000Car loans$3,000Checking account balance$2,000Credit card balance$1,000Suppose that Jordan wins $100,000 in the lottery. If he uses that money to pay off his mortgage, his wealth would ________; if he puts that money in his checking account, his wealth would ________.
A. increase to $209,000; increase to $209,000 B. not change; increase to $207,000 C. increase to $207,000; not change D. increase to $209,000; not change
According to public choice theory, which of the following is not a likely reason that government policy might benefit only a narrow interest group?
A. If the benefits to the narrow interest group are relatively large, they have an incentive to invest a lot of money and effort in lobbying government. B. If the costs of this policy are spread out among the general population, and are a very small burden for anyone person, then those paying the costs have little incentive to organize opposition. C. The additional rewards of a policy to the general population outweigh the additional costs that are imposed on a narrow interest group. D. Politicians follow their own self-interest and seek to maximize their reelection chances rather than promoting the best interests of society.
Resources are all of the following except:
A. unlimited and in abundance. B. the things we use to produce goods and services. C. limited in quantity and can be used in different ways. D. scarce and therefore require choices to be made.
The monetary policy transmission mechanism refers to the concept that monetary policy:
A. affects the economy in potentially many ways. B. only works through changes consumption and investment. C. works quickly. D. always seems to work the way central bankers think it will.